Netcraft, an Internet services company based in Bath, England, reported that, as part of its July 2009 Web Server Survey, it received responses from 239,611,111 sites, an increase of around 1.5 million sites from the previous month. I’m sorry, did somebody just say Web sites are proliferating at something like 1,500,000 per month?

Social media usage is exploding. Recent data indicates that Facebook has over 200,000,000 users, while Twitter has over 7,000,000 users. According to Technorati data as reported on Wikipedia, at the end of 2007 more than 112,000,000 blogs existed.

Blogs, Facebook and Twitter accounts, texting, and the use of other social media by employees can create many risks for employers. Unlike conversations, social media postings leave a data trail — and that data trail can quickly be tracked, copied, and distributed to an unlimited number of readers. The news headlines are filled with stories of poor judgment by employees on social media sites. Microsoft fired an employee who published photos of Apple computers being loaded into a Microsoft research facility. Delta airlines fired a flight attendant who posted photos of herself in a corporate uniform. Google fired an employee who blogged about, among other things, Google’s compensation.

Singer summarizes employers’ risks from their employees’ social media activity as including:

publication of trade secrets;

dissemination of confidential information relating other employees, customers, or business partners;

copyright and trademark infringement;

libel; and

loss of control of business reputation

The problem for employers seems to be that they’re damned if they do and damned if they don’t. As marketing mavens turn from paper media, to Web, to blog, to Twitter campaigns and beyond, their corporate clients are feeling the pinch of a currently unfathomable economic slowdown, necessitating a higher ROI from potentially declining marketing budgets. One apparently easy answer may be to enlist and unleash employees with their low cost or no cost viral marketing abilities.

Bloggers and anyone else using social media need to be aware of what they post online. There is a serious threat of what you post can result in litigation.

I recently reported that there has been a 216% increase in libel lawsuits against bloggers. Courtney Love’s Twitter defamation case is not going away.

Yelp, the popular review site, has been at the center of the debate because people are using the service to write reviews that are untrue.

A $1 million judgment, including an injunction and costs was granted against a defendant who persisted in posting false and defamatory statements in online forums regarding his fraudulent transactions at the expense of an online company.

OK, so maybe a little “sensitivity training” might be in order before unleashing the hordes of marketing hounds, but what if they turn on you? Deloitte LLP’s 2009 Ethics & Workplace survey indicated that:

60 percent of business executives believe they have a right to know how employees portray themselves and their organizations in online social networks. However, employees disagree, as more than half (53 percent) say their social networking pages are not an employer’s concern. This fact is especially true among younger workers, with 63 percent of 18–34 year old respondents stating employers have no business monitoring their online activity.

That said, employees appear to have a clear understanding of the risks involved in using online social networks, as 74 percent of respondents believe they make it easier to damage a company’s reputation.

With the explosive growth of online social networks, such as Facebook and Twitter, rapidly blurring the lines between professional and private lives, these virtual communities have increased the potential of reputational risk for many organizations and their brands…

Social networking is helping companies…cut legal fees by providing groups and forums for them to discuss and share ideas and answers to legal questions for free. For instance, on Linked In, there are topic groups that you can subscribe to, like Intellectual Property. You can then post questions and answer other people’s questions. Human resources professionals are also benefiting. Of course, there are issues about the lack of attorney-client privilege and there is no privacy to the questions. However, for general inquiries that are not private … these sites can really help.

Breaking down the buzz word “social networking” you get two core concepts of communication. Social and networking. Whether you are in a conference break-out session, happy hour, basketball court sideline, or company luncheon you have an opportunity to interact with others in a less-formal, more-personal way. Similarly, social networking allows a candid flow of thought and exchange of ideas. Just like your career counselors encouraged you to do in law school in their odes to the power of networking, connecting and sharing online is a form of networking. And one that seems to be gaining some street cred from its offline cousin. And though three years of legal training has drilled in considerations of liability, privacy, and confidentiality, it is up to the innovative devices of in-house counsel to find constructive and ethical uses of social networking that will inspire progress and productivity within their legal departments.

Woody Allen is quoted as saying: “Eighty percent of success is showing up.” Many of the financial advisors I’ve talked to in recent months, as well as wealthy clients, seem to be saying the same thing about survival in our depressed economy. Their goal, rather than making money, often focuses on not losing as much as anyone else. In the final analysis, they speculate (no pun intended), if they are able to keep from losing more of what they have than the competition loses, they’ll still be ahead of the game when things turn around, as they always do.

The depth of “expertise” of most social media consultants must be subject to scrutiny. After all, the field itself is still emerging and changing by the second. We’re all just starting to explore this murky new territory. The maps we draw for our clients to follow may sometimes be no more useful than a sandcastle built too close to the ocean surf.

Given the shifting sands on which we stand, our greatest success may come from simply failing to make as many mistakes as our competitors, and, as Woody Allen suggests, staying around for the next act.

We may not have a firm grip yet on what really works in the universe of social media. We are quickly learning, however, what doesn’t work, and how large the judgments, legal fees, and lost profits can be when we make easily avoidable mistakes. It is the avoidance of those mistakes that a well-formulated, organic social media policy can easily prevent. A good policy can encourage the cost saving benefits corporate lawyers have already found.

This is far from a perfect solution or tool, but the process of creating a social media policy for your company, getting employees and managers to buy into the process and become stakeholders in the positive results it can bring, can go a long way to making your company one of the survivors. That may be enough to make you the victor in your arena. I’ll explore this process in a future series of posts on this blog.

That’s what I think. Please leave a comment and let us know what you think.

If you are really interested, I just started yet another free group on LinkedIn,Social Media Search and Forensics. Many of these articles and discussion about them are posted there. Please join us.

The first post on this new blog, Social Lies and Fundamental Shift, seemed to proclaim we were experiencing a fundamental shift from the “information Web” to the “social Web.” The inference was that this was significant in some fashion. I guess that depends upon how you look at things, literally.

Some of us are old enough to remember spending hours in the library looking up information in books and periodicals. That may be a fading image, since an increasing number of studies, such as one by Publishers Communication Group, E-books in 2008; Are librarians and publishers on the same page?, indicate librarians are now more seriously considering the return on investment from e-books and other electronic media vs. traditional print media, when preparing their budgets in these financially troubled times. It would seem the title tells the story. There are certainly many stories in the news about long-standing publication giants, who are folding their tents as readership and revenues sink.

One other side of the shift seems to be in the area of instant experts on use of social media as a business tool. I can’t recall any profession, including Web optimization experts, growing as quickly as the number of self-proclaimed social Web experts. Perhaps this is because of my own foray into this area. They say, “if you want to shoot a moose, you have to go where the moose are.”

Frankly, I seem to be surrounded by moose, but can’t remember how I got here. Social media experts seem to surround me wherever I go. No matter what I search for online, I run into “experts” in this area.

One of the things, which has drawn me into the realm of social media, is the number of my business start-up clients who are using social media tools, such as facebook, as a major part of their business plan. A year ago, this was not true. There may have been a few who mentioned it in passing, but these days, a substantial percentage of start-up clients seem to be counting on their ability to market their business to a large group with little outbound cash flow, using facebook and other social media.

I’ve been practicing law long enough to remember the era when many clients came to me thinking that successfully registering a “cool” domain name was a business plan. Granted, that was before most of our current cyber squatting laws, and well before the tech bubble burst. To my chagrin, some of the clients who had been subjected to my lectures about the usefulness of a real business plan, actually made substantial sums of money just by getting a particular domain name registered sans business plan. They were few and far between, and for the most part, their “fame” was fleeting. This was clearly not a sustainable competitive advantage for them, even if they managed to cash in to some extent.

Although the results are far from certain, there can clearly be some merit for retailers and others, using social media channels to market their businesses. I’ve even started recommending it myself, if my clients don’t bring it up. The information on how to do this is easily available and simple to follow, as indicated by Mark Ijlal’s handy article, How To Set Up A Custom Landing Page For Your Business Facebook Fan Page.

Of more interest to me in writing this blog, is what happens when use of social media becomes embedded in business operations. It seems inevitable this will happen, at least until the next paradigm shift. Michael Specht offers a fair argument for this in his article, Social Media In the Workplace:

Remember your employees are using these tools even if you don’t realise it. They have it at home, on their phones everywhere.

Add to this that the workplace is changing. Those crazy Gen Y’s will make up 42% of the workforce by 2020, let’s not even begin to think about to (sic) ones behind.

My understanding of part of what the “experts” predict will happen, as Web 3.0 replaces Web 2.0, is that the current borders between what one thinks and what happens will start to blur. In other words, thought starts to become reality. Is this science fiction, or simply the natural progression of the current path we’re on?

One of my favorite science fiction works is Forbidden Planet. This 1956 movie by Fred Wilcox takes place in the 23rd century and starred Leslie Nielson decades before his appearances in the Naked Gun and Scary Movie series. The plot of Forbidden Planet involves rescue of an archeological team from a distant planet, where the highly advanced, native Krell population had mysteriously died out in a single night. At the risk of spoiling the movie if you’ve not seen it, the Krell developed a huge machine, which was able to turn their thoughts into material objects. Unfortunately for the Krell, one of these turned out to be a monster from the id, later conjured up by the subconscious activity of one of the stars of the movie.

The stars of the movie experimented with a training “toy,” apparently designed by the Krell to help improve their mental focus. Not necessarily coincidentally, I just saw a version of this toy in a catalog yesterday, although the reference was to a Star Wars Jedi training device. What this brings to mind, aside from science fiction authors “borrowing” ideas from each other, is a book by another science fiction star, William Shatner, I’m Working on That : A Trek From Science Fiction to Science Fact.

Shatner’s book points out the cyclical relationship between science fiction authors and science. Many authors study emerging technologies and philosophies about “what’s out there,” in order to come up with ideas or make their fiction more believable. On the other hand, some scientists and entrepreneurs seem to be able to cash in on science fiction by making the “fiction” a reality. The “communicator” device used in the Star Trekseries on TV, which made Shatner famous, seemed to morph into our cell phones. Shatner recounts a number of other current “every day” devices, which can attribute their origins to his TV program.

I’m old enough to remember a time when my secretary used a typewriter. I’m also old enough to remember a time when I didn’t know how to use a computer and was actually afraid to try to learn, yet here I am blogging away with no visible means of support (a danger for much of the Web 2.0 generation without an alternate stream of income). In my case, the reference, fortunately, is to the lack of need for any support staff to type this, something not possible for me a decade or so ago in those ancient “pre-Web 1.0” days.

I started learning how to use a computer after reading an article in the local paper, which talked about a major law firm in the area buying hundreds of computers and “forcing” everyone to become familiar with how to use them. The inducement for the lawyers was that they had to start filling out their time slips “online,” whatever that meant, or they didn’t get paid. I understood getting paid, and if they were doing it, I wanted to do it too!

A few years ago, if we wanted to record something important, like a legal document, we had to type it, or find somebody who could. My worst grade in high school was in typing class, which was an “elective” course my mother thought I should take. What a pain. I was a horrible typist, and when I passed the bar exam and hung my “shingle,” my secretary was the only one creating the final version of important written communications. Granted, I might create and edit, but she was the only one capable of working the magic needed to produce a final version fit for publication.

Then came machines that could “remember” what we had typed, so this information could be stored and used again without retyping it. This turned into document assembly and database mining, as well as many other “advanced” techniques. We became more productive overnight.

Within a relatively short time, some smart folks came up with the idea of turning speech into text. At this point one hardly had to “think” at all to turn thoughts into words, not necessarily a good thing. Typing was more deliberate, but speech recognition programs like Dragon Naturally Speaking, allowed our thoughts to roam as we drove to court or a business meeting. Shortly upon this technology maturing to the point of usefulness, we could use it to send e-mail and other communications using voice recognition. We not only became more productive, we became more prolific, once again, not necessarily a good thing.

The impact of our thoughts, including the physical trail they left, was growing rather than shrinking. The number of our “published” thoughts was also increasing at a tremendous rate. This, however, appears to be just the tip of the iceberg.

Web 3.0 promises to make such “gadgets” universal and “seamless,” to borrow an overused term. One must admit there has been a major paradigm shift, from trying to get one’s secretary in to type or retype a letter a decade ago, to the current use of self-posting blogging tools and ability to twitter to the world from anywhere in the world. Web 3.0 promises to make this available to everyone in a fashion they won’t even notice, and it is happening before our eyes and behind our backs.

Now, when getting ready for a meeting or to conduct voir dire of a potential jury, I am “required,” as Nicole Black points out in her article, Can Lawyers Afford to Ignore Social Media?, to spend some time investigating the background of those whose faces I’ll be seeing in a few minutes. What they will tell me is one thing, but I now have a rapidly increasing ability to determine what is on their mind, even if they don’t realize it themselves. While they interact in a business meeting, or respond to questions from a trial lawyer about potentially disqualifying prejudices against a party in litigation, the person on the other side of the table has an opportunity to look into their facebook or LinkedIn profile, to discover what really interests them.

We get told that new social media tools will destroy all others, life will change beyond recognition, mass media is ‘legacy media’, about to go the way of mastodons.

Eric Newton of the Knight Foundation – an amazing digital migrant who has gone native to a brilliant degree – summed up some of the questionable assumptions of the social media community thus:

Everyone has access to new media. (And we know that is not true, especially in developing countries.)

Everyone has goodwill and will not harm others.(We know that is not true because some pretty bad people use new media to pursue evil ends.)

Everyone can correct each other. (We know that is not true because education levels vary, ignorance persists on the Web, information access varies etc.)

Everything is transparent. (We know that is not true because manipulation goes on, identities get hidden, advertisers make bloggers support products without owning up to being paid and so on. See “Truth in Advertising, Offline or Online”.)

The point, of course, is not to knock social media, but to suggest that all the mechanisms that shape the public sphere need cool analysis in order to manage inevitable complexities. Every new technology throws up ethical and governance challenges, and these need to be frankly acknowledged and managed.

The cool analysis seems to me to be the key, and, hopefully, part of the mission of this blog. As we focus on the minutiae, in order to conduct this analysis, it also seems apparent that we must try to detect the larger impact. For starters, twittering and texting teens will become the leaders of our Fortune 100 companies in the not too distant future. Interpersonal skills have transformed for both the better and the worse, in my humble opinion, due advances in technology. Communications are clearly much more rapid and far-reaching. Did I mention this is not always a good thing?

The ability to use and abuse these tools grows more powerful at a tremendous rate. Who has not pushed “send” on an e-mail that was not finished, or perhaps contained something we wished we could take back? Who has not accidentally overlooked someone who accidentally received a private or even confidential electronic communication, simply because the sender forgot they were “CCed” on the e-mail?

Lawyers are trained to be the most sensitive people on this planet, to the accidental or unauthorized disclosure of confidential information, yet the stories grow about even these guardians of confidentiality breaching the walls. What hope do we then have that our employees, and perhaps our CEOs will be able to keep the genie in the bottle, or at least direct this new power better than the Krell of science fiction lore? Watch the movie and you might see our future.

That’s what I think. Please leave a comment and let us know what you think.